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Famous and Celebrity Bankruptcies

Perhaps some the social worker somewhere deep in a prison cell with access to the proper databases could research how close to bankruptcy the average citizen comes. While it is true that few of us are ever required to take the public and humiliating step of bankruptcy, many of us can feel the pain.

Funny thing about insolvency and bankruptcy is that as diseases go, it tends to hit the rich and famous disproportionately. Some of that is because of a reality known only to lawyers - that bankruptcy can be an excellent tool for debt elimination - but most of it is simply bad money management - like with any bankrupt. So if you are sitting there reading this contemplating economic suicide, may the following words give you comfort as from where you will fall, others have fallen from far, far above.

Phineas Taylor "P.T." Barnum

Entrepreneur on steroids may well be the words that would be used to describe this one time bankrupt, Phineas "P.T." Taylor Barnum. One of his sayings:

"Whatever you do, do it with all your might. Work at it, early and late, in season and out of season, not leaving a stone unturned, and never deferring for a single hour that which can be done just as well now."

Both his pre and post-bankruptcy resumes are incredible; this guy simply never stopped. He packed several lifetimes into one. The bankruptcy occurred midlife; when he was 45 and as a bookmark, that is all it ever was.

Barnum had already been wildly successful with his very controversial but highly lucrative exclusive agreement with the Swedish singer singer Jenny Lind and the midget Tom Thumb. His museum was also making his fortune.

Barnum, already a celebrity - rich and famous - when he conceived of the idea to build a city, East Bridgeport. He had a partner, William Noble and a start date, 1951; and money. One of his projects was the Mountain Grove Cemetery where he ended up being buried along with many of his performers including Tom Thumb. Barnum kept borrowing money. His cousin Edward T. Nicols began forging his signature just as Barnum's investments in a car company were souring. Boom! The showman was bankrupt. He owed $500-thousand more than he owned. Unable to pay his debts, every creditor last a promissory note, many with mortgages, some properties with multiple mortgages. Barnum lost his world famous American Museum of New York City, with 850,000 exhibits including a wax museum. Barnum escaped to rented premises in New York City, where his creditors found him and summoned him to court frequently. He moved on as a very popular travelling speaker, in England and in Europe, bringing with him his friend and Bridgeport native Tom Thumb.

But he was a showman and his time was far from done. He started back slowly and his recovery took him five years. Then he got himself elected to the Connecticut legislature in 1865. In 1878, he started the Bridgeport Hospital and acted as its first president. He managed to reacquire the American Museum in New York City.

Time in show business was forever marked when P. T. Barnum quietly established another travelling circus and freak show, this one initially called the PT Barnum's Grand Traveling Museum, Menagerie, Caravan & Hippodrome, for which he drew heavily from the American Museum collection.

He was already 71 years old when he merged with fellow American, James Anthony Bailey in 1880, the predecessor of the Barman & Bailey Circus. Barnum's management of this circus quickly brought the enterprise to the top of the world. He practiced the art of moving a service by train and whip it across America and England.

When he died on April 7, 1891, his name was synonymous with wonder and success. So successful and significant was his recovery that few could recall the 1851 insolvency.

Kimila "Kim" Ann Basinger

Born in Athens, Georgia in 1953, Kim Basinger (kim-basinger.org/) was, for a time, the hottest starlet of the big screen. Her big break was the James Bond movie Never Say Never Again with Sean Connery. She then posed nude for Playboy. This was followed by a lead role with Robert Redford in The Natural, which was followed up by other smash hits such as 9 1/2 Weeks and L.A. Confidential, for which she won an Oscar as Best Supporting Actress.

At one point, she was so rich that she wrote a cheque to buy a whole town, Braselton, Georgia (population 500) for $20-million.

But Basinger tripped in 1993 when she reneged on an oral contract to perform in a movie called Boxing Helena. She was sued by the production company Main Line Pictures. At trial, she disclosed her net worth to be $5-million but the California jury still ordered her to pay $8-million in damages. She reacted by filing for bankruptcy. Even in post-bankruptcy proceedings, the dispute with Main Line lingered (she later settled privately with Main Line).

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Duhaime Lawisms

We must not, by any whimsical conceits supposed to be adapted to the altering fashions of the time, overturn the established law of the land. It descended to us as a sacred charge and it is our duty to preserve it.
Justice Kenyon, Clayton v Adams, (1796) 6 T.R. 605

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Unless otherwise noted, this article was written by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public!). It is not intended to be legal advice and you would be foolhardy to rely on it in respect to any specific situation you or an acquaintance may be facing. In addition, the law changes rapidly and sometimes with little notice so from time to time, an article may not be up to date. Therefore, this is merely legal information designed to educate the reader. If you have a real situation, this information will serve as a good springboard to get legal advice from a lawyer.